TOKYO--(EON: Enhanced Online News)--LINE Corporation (NYSE:LN) (TOKYO:3938) (Headquarters: Shinjuku-ku,
Tokyo, Japan; President & CEO: Takeshi Idezawa; hereinafter the
“Company”) announced on February 23, 2017, the introduction of an
Employee Stock Ownership Plan (J-ESOP; hereinafter called the “Plan”;
and the trust to be established based on the trust agreement concluded
with Mizuho Trust & Banking Co., Ltd. for the Plan, hereinafter called
the “Trust”) and has now determined the details, including the date of
establishment of the Trust, etc. at the Board of Directors Meeting held
today.

In conjunction with the introduction of the Plan, the Company has
simultaneously decided to assign 1,007,810 new shares (3,999,997,890
yen) to Trust & Custody Services Bank, Ltd. (Trust E). For details,
please refer to “Notice Regarding the Offering of Shares to Be Issued
through Third-Party Allotment in Accordance with the Introduction of the
Employee Stock Ownership Plan” dated today.

1. Overview of the Trust

(1) Type of Trust: Trust of money other than money trust
(third-party trust)

(2) Purpose of Trust:

To provide stock of the Company and other assets to beneficiaries,
in accordance with the Regulations on Stock Compensation

Persons who have acquired the right to receive assets pursuant to
the provisions of the Regulations on Stock Compensation

(6) Trust Agreement Date: June26, 2017

(7) Trust Period: From June 26, 2017 to the termination of the Trust

(The Trust termination date is not yet decided; the Trust will
continue as long as the Plan continues.)

(8) Plan Start Date: July 18, 2017 (tentative)

(9) Share Acquisition Date: July 18, 2017 (tentative)

(10) Share Acquisition Amount: 3,999,997,890 yen (tentative)

Notice Regarding the Offering of Shares to Be Issued through
Third-Party Allotment in Accordance with the Introduction of the
Employee Stock Ownership Plan

LINE Corporation (Headquarters: Shinjuku-ku, Tokyo, Japan; President &
CEO: Takeshi Idezawa; the “Company”) announces that it passed a
resolution at its board meeting held today to conduct an offering of
shares by means of a third-party allotment (the “Third-Party
Allotment”), in accordance with the introduction of an Employee Stock
Ownership Plan (J-ESOP; the “Plan”) that was announced on February 23,
2017, as follows.

1. Overview of the offering

(1)

Payment date

Tuesday, July 18, 2017

(2)

Type and number of shares to be issued

1,007,810 shares of common stock

(3)

Issue price

3,969 yen per share

(4)

Total issue price

3,999,997,890 yen

(5)

Method of offering or allotment

Third-party allotment

(6)

Prospective Allottee

Trust & Custody Services Bank, Ltd. (Trust E)

(7)

Other

The offering is subject to notification in accordance with the
Financial Instruments and Exchange Act being effective.

2. Purpose and reasons for the offering

The Company announced its introduction of the Plan on February 23, 2017,
and then passed a resolution regarding detailed matters of the Plan at
its board meeting held today. (For a summary of the Plan, please see the
“Notice Regarding Introduction of Employee Stock Ownership Plan
(Determination of the Details)” announced today.

The new shares to be issued through the Third-Party Allotment will be
allotted to Trust & Custody Services Bank, Ltd. (Trust E) (the successor
trustee entrusted by Mizuho Trust & Banking Co., Ltd., the trustee for
the Plan) that is in charge of holding and disposing of the Company’s
shares and is established upon introduction of the Plan.

3. Amount, use, and scheduled timing of use of funds to be procured

(1) Amount of funds to be procured (estimated net amount
after expenses)

Total amount to be paid (yen)

Estimated expenses ofissuance (yen)

Estimated net amount after expenses(yen)

3,999,997,890 yen

－

3,999,997,890 yen

Notes)

1.

The “Estimated expenses of issuance” are paid apart from “Total
amount to be paid,” and the “Total amount to be paid” wholly
becomes the “Estimated net amount after expenses.”

2.

The “Estimated expenses of issuance” are 21,250,000 yen, and they
do not include consumption tax or the like. They includes
estimated registration expenses, advisory fees and expenses of
listing on a stock exchange.

(2) Use of the funds to be procured

The estimated net amount after expenses of 3,999,997,890 yen mentioned
above will be appropriated entirely to operating funds, including
payment of expenses on and after the payment date. The funds will be
managed in the Company’s bank account until they are used for the above
purpose.

4. View on reasonableness of use of funds

The Company believes that the planned use of the funds to be procured by
issuing new shares through the Third-Party Allotment is reasonable, as
it will contribute to the operation of the Company’s business.

5. Reasonableness of issuance terms and conditions

(1) Basis for calculation of issue price and details thereof

In order to determine the issue price non-arbitrarily, the Company set
the issue price at 3,969 yen (any fraction less than one yen is rounded
off), the average closing price of the Company’s common stock traded on
Tokyo Stock Exchange, Inc. during the one-month period from May 24,
2017, to the day immediately preceding the Board of Directors meeting at
which the resolution for the Third-Party Allotment was passed (June 23,
2017). The reason for adopting the average closing price of the
Company’s common stock traded on the Tokyo Stock Exchange during the
one-month period immediately preceding the resolution at the Board of
Directors meeting is because the Company considers that it is more
objective and reasonable as a calculation base to use the leveled value
of the average share price over a certain period, rather than using the
price at a specific point, since special factors such as temporary
fluctuations in the share price are eliminated. In addition, the reason
why the Company has adopted the most recent one-month period as the
calculation period is that the Company believes it is more reasonable to
adopt a certain period in which the average share price is closest to
the most recent market price than to adopt the most recent three or six
months.

The issue price of 3,969 yen is equal to (i) the closing price (3,995
yen) of the Company’s stock on the business day immediately preceding
the date of the resolution at the board meeting multiplied by 99.35%;
(ii) the average of the closing prices (3,988 yen, any fraction less
than one yen is rounded off) of the Company’s stock during the three
months starting from the business day immediately preceding the date of
resolution at the board meeting multiplied by 99.52%, and (iii) the
average of the closing prices (3,935 yen, any fraction less than one yen
is rounded off) of the Company’s stock during the six months starting
from the business day immediately preceding the date of resolution at
the board meeting multiplied by 100.86%. Taking these into
consideration, the Company believes that the issue price for the
Third-Party Allotment is not especially favorable to the prospective
allottee and is reasonable.

Regarding the issue price stated above, 3 Corporate Auditors who
attended the board meeting (2 of which are outside Corporate Auditors)
have expressed their opinion that the price is not especially favorable
to the prospective allottee.

(2) Basis for assessing that the number of shares to be issued and level
of share dilution are reasonable

The number of shares to be issued through the Third-Party Allotment
corresponds to the number of shares expected to be granted to the
employees of the Company and those of its subsidiaries (“Relevant
Employees”) during the trust period in accordance with the Regulations
on Stock Compensation; and it will be 0.46% of the total issued and
outstanding shares (219,309,500 shares) as of May 31, 2017 (rounded off
to two decimal places) and 0.46% of the total voting rights (2,192,959
voting rights) as of May 31, 2017 (rounded off to two decimal places).
It is unlikely that the shares involving the Third-Party Allotment may
be placed on a stock market all at once. In addition, the Third-Party
Allotment will enhance morale and motivation of the Relevant Employees
and contribute to securing excellent human resources and their long-term
success, thereby enhancing the Company’s corporate value. As such, the
Company believes that the level of share dilution is reasonable, and
there will only be a minor effect on the secondary market.

6. Reason for selection of prospective allottee

(1)

Overview of the prospective allottee

1)

Name:

Trust & Custody Services Bank, Ltd. (Trust E)

2)

Details of Trust Agreement (J-ESOP Agreement):

Type of Trust:

Trust of money other than monetary trust (third-party trust)

Purpose of Trust:

To provide stock of the Company and other assets to beneficiaries,
in accordance with the Regulations on Stock Compensation

(14) Business results and financial conditions over the last three
fiscal years (unit: million yen, unless otherwise specified)

Fiscal year ended

March 31, 2015

March 31, 2016

March 31, 2017

Net assets

59,419

60,385

60,771

Total assets

1,993,528

5,473,232

11,424,703

Net assets per share (yen)

59,419

60,385

60,771

Ordinary revenue

23,785

24,500

23,462

Ordinary income

1,792

1,721

990

Net income

1,129

1,129

674

Net income per share (yen)

1,129.20

1,129.27

674.44

Dividends per share (yen)

230.00

230.00

135.00

*

Trust & Custody Services Bank, Ltd. is a subsidiary of Mizuho
Financial Group, Inc.; based on our research on public information
posted on Mizuho’s website and disclosure materials (such as the
Business Code of Conduct), the Company confirmed that none of the
prospective allottee nor its officers or major shareholders (major
contributors) have any connection with anti-social forces, and
submitted a confirmation letter to that effect to Tokyo Stock
Exchange, Inc.

(2) Reason for selecting the prospective allottee

In accordance with the introduction of the trust to be created under the
trust agreement to be executed with Mizuho Trust & Banking Co., Ltd.
regarding the Plan, the Company allots the shares to the Trust E opened
at Trust & Custody Services Bank, Ltd., the successor trustee, pursuant
to the trust agreement.

(3) Prospective allottee’s policy on holding shares

In accordance with the above-mentioned trust agreement, the prospective
allottee, Trust & Custody Services Bank, Ltd. (Trust E), will possess
the shares of the Company in order to provide the trust assets (such as
shares of the Company) to the beneficiaries during the Trust Period, in
accordance with the Regulations on Stock Compensation.

If the prospective allottee, Trust & Custody Services Bank, Ltd. (Trust
E), transfers all or part of the allotted shares within two years from
the payment date (July 18, 2017), the Company will obtain from the
prospective allottee informal consent to concluding a pledge agreement
with the Company, under which the prospective allottee shall immediately
report to the Company, in writing, the purchaser’s name and address, the
number of shares transferred, the transfer date, transfer price,
transfer reason, transfer method, etc., thereof, and the Company shall
report the details of the report to the Tokyo Stock Exchange, Inc.; and
the details of the report shall be made available for public inspection.

(4) Confirmation that the prospective allottee has the funds required
for payment

The Company has confirmed through the J-ESOP Trust Agreement that with
respect to the monetary equivalent to the funds required for payment by
the prospective allottee, the initial trust money to be contributed by
the Company to the Plan will exist within the trust assets as of the
allotment date, as stated in the “Notice Regarding Introduction of
Employee Stock Ownership Plan (Determination of the Details)” announced
today.

For details, please refer to the “Notice Regarding Introduction of
Employee Stock Ownership Plan (Determination of the Details)” announced
today.

7. Major shareholders and shareholding ratios after the offering

Before the offering (as of May 31, 2017)

After the offering

NAVER CORPORATION

79.80%

NAVER CORPORATION

79.43%

MOXLEY & CO LLC

5.13%

MOXLEY & CO LLC

5.11%

CBHK－KOREA SECURITIESDEPOSITORY -SAMSUNG

0.72%

CBHK－KOREA SECURITIESDEPOSITORY -SAMSUNG

0.71%

The Master Trust Bank of Japan, Ltd.(trust account)

0.45%

Trust & Custody Services Bank, Ltd.(Trust E)

0.46%

BNY GCM CLIENT ACCOUNTJPRD AC ISG (FE -AC)

0.37%

The Master Trust Bank of Japan, Ltd.(trust account)

0.45%

Japan Trustee Service Trust Bank, Ltd.(trust account)

0.32%

BNY GCM CLIENT ACCOUNTJPRD AC ISG (FE -AC)

0.37%

BNP PARIBAS SECURITIESSERVICES LUXEMBOURG/JASDEC/
HENDERSON HHF SICAV

0.25%

Japan Trustee Service Trust Bank, Ltd.(trust account)

0.32%

STATE STREET BANK WESTCLIENT -TREATY 505234

0.24%

BNP PARIBAS SECURITIESSERVICES LUXEMBOURG/JASDEC/
HENDERSON HHF SICAV

0.25%

THE BANK OF NEW YORK 134168

0.24%

STATE STREET BANK WESTCLIENT -TREATY 505234

0.24%

RBC IST 15 PCT LENDINGACCOUNT - CLIENT ACCOUNT

0.22%

THE BANK OF NEW YORK 134168

0.24%

Note)

1.

The major shareholders and shareholding ratios after the offering
are based on the register of shareholders as of May 31, 2017.

2.

The foregoing shareholding ratios are the ratios of voting rights
held against the total number of voting rights.

8. Outlook for the future

There will be a minor impact on the business prospect for the current
fiscal year.

9. Procedures under the Business Code of Conduct

Since the Third-Party Allotment (i) results in share dilution of less
than 25%, and (ii) does not cause a change in controlling shareholder,
obtaining an opinion from an independent third party and confirming the
intention of the shareholders as set forth in Article 432 of the
Securities Listing Regulations established by the Tokyo Stock Exchange,
Inc. are not required.

10. Business results and equity finance position for the past three
fiscal years

(1) Results for the past three years (Consolidated)

Fiscal year ended

December 31, 2014

December 31, 2015

December 31, 2016

Revenue

86,366 million yen

120,405 million yen

140,704 million yen

Profit before tax fromcontinuing operations (△shows
loss)

6,262 million yen

△530 million yen

17,989 million yen

Profit for the period (△shows loss)

2,004 million yen

△7,972 million yen

7,103 million yen

Profit attributable to theshareholders of theCompany
(△ showsloss)

4,206 million yen

△7,581 million yen

6,762 million yen

Basic earnings per share(△ shows loss)

24.05 yen

△43.33 yen

34.84 yen

Dividends per share

- yen

- yen

- yen

Equity attributable to theshareholders of theCompany

71.41 yen

101.39 yen

738.53 yen

Note)

The consolidated financial statements have been prepared in
accordance with the International Financial Reporting Standards
(IFRS).

(2) Number of issued and outstanding shares and number of
potential shares (as of May 31, 2017)

Number of shares

Percentage of issued and outstanding shares

Number of issued and outstanding shares

219,309,500

100.0%

Number of potential shares at current conversion price (strike price)

21,371,500

9.74%

Number of potential shares at lower-limit conversion price (strike
price)

-

-

Number of potential shares at upper-limit conversion price (strike
price)

-

-

Note)

“Potential shares” refers to shares convertible from stock options.

(3) Recent stock prices

1) Most recent three years

Fiscal year ended

December 31, 2014

December 31, 2015

December 31, 2016

Opening price

- yen

- yen

4,900 yen

High

- yen

- yen

5,230 yen

Low

- yen

- yen

3,780 yen

Closing price

- yen

- yen

4,010 yen

Note)

The Company listed on Tokyo Stock Exchange on July 15, 2016,
therefore there are no applicable stock prices before that.

2) Most recent six months

December2016

January 2017

February2017

March2017

April2017

May2017

Opening price

4,450yen

3,990yen

3,590yen

3,830yen

4,245yen

3,810yen

High

4,465yen

4,195yen

3,950yen

4,320yen

4,370yen

3,935yen

Low

3,930yen

3,530yen

3,490yen

3,805yen

3,795yen

3,655yen

Closing price

4,010yen

3,625yen

3,870yen

4,275yen

3,865yen

3,810yen

3) Stock prices on the transaction day immediately preceding the date of
resolution to issue new shares

As of June 23,2017

Opening price

4,000yen

High

4,035yen

Low

3,980yen

Closing price

3,995yen

(4) Equity finance position during the most recent three years

Issuance of new shares by public offering (domestic offering and
overseas offering)

For investment in and financing for LINE Mobile Co., Ltd.
(formerly LMN Co., Ltd.) that operates LINE mobile services, and
LINE MUSIC Co., Ltd.;

For investment and financing through investment funds of the
Company’s group, and investment under the growth policy via the
LINE business portal service.

Planned timing of use of funds at the time of issuance

Repayment of short-term borrowings: FY ended December 2016

Repayment of corporate bonds: FY ended December 2016

Capital investment: FYs ended December 2016, December 2017, and
December 2018

Operating funds: FYs ended December 2016, December 2017, and
December 2018

Investment in and financing for LINE Mobile Co., Ltd. and LINE
MUSIC Co., Ltd.: FY ended December 2016

The specific timing of the investment under the growth strategy
was not determined.

Current status regarding use of funds

As originally planned, the funds are being used for the repayment of
short-term borrowings and corporate bonds, capital investment,
operating funds, investment in and financing for LINE Mobile Co.,
Ltd. and LINE MUSIC Co., Ltd., and investment under the growth
strategy.

Issuance of new shares through third-party allotment in accordance
with domestic and overseas offering via over-allotment

Payment date

August 16, 2016

Amount of funds to beprocured

16,545,375,000 yen (estimated net amount after expenses)

Issue price

2,295 yen

Number of shares issuedat the time of offering

209,992,000 shares

Number of shares issuedthrough such offering

5,250,000 shares

Total number of sharesissued after the offering

215,242,000 shares

Allottees

(i) Nomura Securities Co., Ltd. 1,950,000 shares

(Capital increase by domestic third-party allotment)

(ii) Morgan Stanley & Co. LLC 3,300,000 shares

(Capital increase by overseas third-party allotment)

Initial plan regarding useof funds upon issuance

For investment under the growth policy via the LINE business portal
service

Scheduled timing of useupon issuance

The timing was not determined.

Current appropriationstatus

The funds are being used for investment under the growth strategy
regarding the LINE business portal segment.

11. Terms and Conditions of Issuance

(1)

Type and number of shares to be issued

1,007,810 shares of common stock

(2)

Issuance price

3,969 yen per share

(3)

Total issuance price

3,999,997,890 yen

(4)

Amount of stated capital to be increased

1,999,998,945 yen

(5)

Amount of capital reserve to be increased

1,999,998,945 yen

(6)

Payment date

Tuesday, July 18, 2017

(7)

Method of offering or allotment

Third-Party Allotment

(8)

Prospective allottees

Trust & Custody Services Bank, Ltd. (Trust E)

(9)

Other

The issuance is subject to notification in accordance with the
Financial Instruments and Exchange Act being effective.

Recent Stories

TOKYO--(EON: Enhanced Online News)--LINE MOBILE Corporation (hereinafter “LINE MOBILE”), a consolidated subsidiary of LINE Corporation (hereinafter the “Company”), announces that it has executed a ... more »

TOKYO--(EON: Enhanced Online News)--LINE Corporation (NYSE:LN) (TOKYO:3938) announces the summary of its consolidated financial results for the fiscal year ended December 31, 2017. This is an Engli... more »